Boeing Secures $20 Billion Contract for Next-Generation F/A-XX Fighter Program

The US Navy has selected Boeing to develop its next-generation F/A-XX sixth-generation fighter program, which is expected to involve more than $20 billion in full-scale development and multiple test aircraft. The first flight of the new plane is targeted for the 2030s.

Gabelli Commercial Aerospace & Defense ETF (NYSE: GCAD) investors are taking note of this development, as it could have a wider industry impact on the aerospace and defense supply chain.

Tony Bancroft, portfolio manager of GCAD at Gabelli Funds, noted that another large manned program is 'net-positive for the industry' and could benefit companies involved in engines, sensors, composites, mission systems. The F/A-XX award makes Boeing a key player in two major crewed sixth-generation fighter programs.

The new program addresses a longer-term capability gap for the Navy, which has an aging F/A-18 Super Hornet fleet and struggles with operating aircraft carriers against sophisticated anti-access and area-denial systems. The F/A-XX could provide roughly 25% more organic range, helping to close the range and payload limitations of existing carrier-based aircraft.

Bancroft emphasized that human pilots will still be necessary in the era of autonomous systems due to electronic warfare and disrupted communications challenges. This highlights an important theme in defense investing: manned aircraft are not necessarily disappearing.